Item 1.01. Entry into a Material Definitive Agreement.
On May 17, 2021, Core-Mark Holding Company, Inc., a Delaware corporation (the
"Company"), entered into an Agreement and Plan of Merger (the "Merger
Agreement") with Performance Food Group Company, a Delaware corporation ("PFG"),
Longhorn Merger Sub I, Inc., a Delaware corporation and a wholly owned
subsidiary of PFG ("Merger Sub I"), and Longhorn Merger Sub II, LLC, a Delaware
limited liability company and a wholly owned subsidiary of PFG ("Merger Sub
II"). Among other things, the Merger Agreement provides, subject to the
satisfaction or, where permissible, waiver of the conditions to closing set
forth therein, for (i) the merger of Merger Sub I with and into the Company (the
"First Merger"), with the Company continuing as the surviving corporation of the
First Merger and a wholly owned subsidiary of PFG and (ii) promptly after the
First Merger, the merger of the Company with and into Merger Sub II (the "Second
Merger" and, together with the First Merger, the "Mergers"), with Merger Sub II
continuing as the surviving company of the Second Merger and a wholly owned
subsidiary of PFG. Each capitalized term used herein but not otherwise defined
has the meaning given to it in the Merger Agreement.
On the terms and subject to the conditions set forth in the Merger Agreement, at
the effective time of the First Merger (the "First Effective Time"), each share
of common stock, par value $0.01 per share, of the Company (the "Company Common
Stock") issued and outstanding immediately prior to the First Effective Time
(other than any shares of Company Common Stock owned by the Company, PFG, Merger
Sub I or Merger Sub II and any shares of Company Common Stock as to which
appraisal rights have been properly exercised) will be automatically canceled
and converted into the right to receive (i) 0.44 (such ratio, as may be
adjusted, the "Exchange Ratio") validly issued, fully paid and nonassessable
shares of the common stock, par value $0.01 per share, of PFG ("PFG Common
Stock") and (ii) $23.875 in cash, without interest (the "Per-Share Cash Amount"
and, collectively, the "Merger Consideration").
At the First Effective Time, each outstanding time-based restricted stock unit
of the Company held by a nonemployee Company director will be converted into the
right to receive the Merger Consideration. Each outstanding time-based
restricted stock unit of the Company (other than those held by nonemployee
directors of the Company) and performance-based restricted stock unit of the
Company will be converted at such time into a corresponding restricted stock
unit relating to the number of shares of PFG Common Stock as determined based on
an exchange ratio set forth and in accordance with the terms set forth in the
Merger Agreement, in each case, that is governed by the same terms and
conditions as were applicable to such restricted stock unit of the Company
immediately prior to the First Effective Time (with those performance-based
restricted stock units of the Company granted in the year in which the First
Effective Time occurs converting into PFG time-based restricted stock units at
the greater of (i) the target level of performance or (ii) the actual level of
performance as of the First Effective Time, and with those performance-based
restricted stock units of the Company granted prior to the year in which the
First Effective Time occurs converting into PFG time-based restricted stock
units at the actual level of performance). Any accrued but unpaid dividend
equivalents in respect of the converted time- and performance-based units of the
Company will be assumed by PFG.
In connection with the Mergers, PFG and the Company will prepare, and PFG will
file a registration statement on Form S-4 (the "Registration Statement"), which
will include a prospectus with respect to the shares of PFG Common Stock to be
issued in connection with the First Merger and a proxy statement for the
Company's stockholders to solicit the approval of Company stockholders to adopt
the Merger Agreement.
The consummation of the Mergers is subject to certain conditions, including
(i) the adoption of the Merger Agreement by the Company's stockholders, (ii) the
shares of PFG Common Stock to be issued in connection with the First Merger
being approved for listing on the New York Stock Exchange, (iii) the receipt of
U.S. federal antitrust clearance, (iv) the absence of any law or order in the
United States or Canada that prohibits the consummation of the Mergers or any
action initiated by any governmental authority in the United States or Canada
that seeks to prohibit the consummation of the Mergers (a "Legal Restraint"),
(v) the Registration Statement having become effective in accordance with the
provisions of the Securities Act of 1933, as amended, and not being subject to
any stop order suspending the Registration Statement, (vi) the absence of a
material adverse effect on the Company and PFG, (vii) the representations and
warranties of the Company, PFG, Merger Sub I and Merger Sub II being accurate,
subject to the materiality standards contained in the Merger Agreement and
(viii) PFG, Merger Sub I, Merger Sub II and the Company having complied in all
material respects with their respective obligations under the Merger Agreement.
--------------------------------------------------------------------------------
PFG and the Company each made customary representations, warranties and
covenants in the Merger Agreement, including the obligation of PFG and the
Company to use their respective commercially reasonable efforts to conduct their
respective businesses in the ordinary course of business and to refrain from
taking specified actions without the consent of the other party.
Prior to the effective time of the Second Merger (the "Second Effective Time"),
PFG has agreed to take all actions necessary so that, upon the Second Effective
Time, the size of the board of directors of PFG (the "PFG Board") shall increase
by at least one seat and at least one member of the board of directors of the
Company (the "Board") shall be appointed to the PFG Board, as selected by mutual
agreement of PFG and the Company, subject to certain terms in the Merger
Agreement.
PFG has agreed to take all actions necessary to obtain U.S. federal antitrust
clearance as promptly as reasonably practicable (and in any event, not later
than three business days prior to the Outside Date (as defined below)), except
that PFG is not required to agree to any divestiture of assets of PFG and/or the
Company that collectively generated more than $1,800,000,000 of aggregate
revenue during the most recent fiscal year prior to the execution of the Merger
Agreement.
The Merger Agreement also contains a customary covenant restricting the
Company's ability to solicit competing acquisition proposals, but the Core-Mark
Board is permitted to consider unsolicited competing acquisition proposals in
accordance with the terms and conditions of the Merger Agreement.
The Merger Agreement contains certain termination rights for both PFG and the
Company, including (i) if the Mergers are not consummated on or before
February 17, 2022 (the "Outside Date"), which may be extended to May 17, 2022
under certain circumstances, (ii) if Company stockholders do not adopt the
. . .
Item 5.03. Amendments to Articles of Incorporation or Bylaws; Change in Fiscal
Year
On May 17, 2021, the Board approved and adopted an amendment and restatement
(the "Amendment and Restatement") of the Company's Second Amended and Restated
Bylaws (the "Bylaws"), effective as of such date, to add a new Article VII
providing that, unless the Company consents in writing to the selection of an
alternative forum, the Court of Chancery of the State of Delaware (or, with
respect to actions arising under the Securities Act of 1933, the federal
district courts of the United States of America) shall be the sole and exclusive
forum for certain legal actions involving the Company. The Amendment and
Restatement contains other changes that do not affect the substantive content of
the Bylaws.
The foregoing description of the Amendment and Restatement does not purport to
be complete and is qualified in its entirety by reference to the full text of
the Amendment and Restatement, a copy of which is attached hereto as Exhibit 3.1
and incorporated herein by reference.
Item 8.01. Other Events.
On May 18, 2021, PFG and the Company issued a joint press release announcing the
execution of the Merger Agreement. The press release is attached hereto as
Exhibit 99.1.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
Exhibit
Number Description
2.1 Agreement and Plan of Merger, dated as of May 17, 2021, by and among
Performance Food Group Company, Longhorn Merger Sub I, Inc., Longhorn
Merger Sub II, LLC and Core-Mark Holding Company, Inc.*
3.1 Third Amended and Restated Bylaws of Core-Mark Holding Company, Inc.
99.1 Press Release of Performance Food Group Company and Core-Mark
Holding Company, Inc., dated May 18, 2021
104 Cover page Interactive Data File (embedded within Inline XBRL
document).
* Schedules (as similar attachments) have been omitted from this filing pursuant
to Item 601(a)(5) of Regulation S-K. A copy of any omitted schedule will be
furnished to the Securities and Exchange Commission upon request.
Forward-Looking Statements
This Current Report contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. These statements include, but are
not limited to, statements related to our expectations regarding the performance
of our business, our financial results, our liquidity and capital resources, the
impact of PFG's proposed acquisition of the Company (the
--------------------------------------------------------------------------------
"Transaction") and other non-historical statements. You can identify these
forward-looking statements by the use of words such as "outlook," "believes,"
"expects," "potential," "continues," "may," "will," "should," "could," "seeks,"
"projects," "predicts," "intends," "plans," "estimates," "anticipates" or the
negative version of these words or other comparable words.
Such forward-looking statements are subject to various risks and
uncertainties. The following factors, in addition to those discussed under the
section entitled Item 1A. Risk Factors in the Company Annual Report on Form 10-K
for the fiscal year ended December 31, 2020 filed with the Securities and
Exchange Commission (the "SEC") on March 1, 2021, as such factors may be updated
from time to time in the Company's periodic filings with the SEC, which are
accessible on the SEC's website at www.sec.gov, could cause actual future
results to differ materially from those expressed in any forward-looking
statements: the risk that U.S. federal antitrust clearance or other approvals
required for the Transaction may be delayed or not obtained or are obtained
subject to conditions that are not anticipated that could require the exertion
of management's time and resources or otherwise have an adverse effect on the
Company; the possibility that conditions to the consummation of the Transaction,
including adoption of the merger agreement by the Company stockholders, will not
be satisfied or completed on a timely basis and accordingly the Transaction may
not be consummated on a timely basis or at all; uncertainty as to the expected
financial performance of the combined company following completion of the
Transaction; the possibility that the expected synergies and value creation from
the Transaction will not be realized or will not be realized within the expected
time period; the exertion of the Company's management's time and resources, and
other expenses incurred and business changes required, in connection with
complying with the undertakings in connection with U.S. federal antitrust
clearance or other third-party consents or approvals for the Transaction; the
risk that unexpected costs will be incurred in connection with the completion
and/or integration of the Transaction or that the integration of the Company
will be more difficult or time consuming than expected; a downgrade of the
credit ratings of indebtedness, which could give rise to an obligation to redeem
existing indebtedness; potential litigation in connection with the Transaction
may affect the timing or occurrence of the Transaction or result in significant
costs of defense, indemnification and liability; the inability to retain key
personnel; the possibility that competing offers will be made to acquire the
Company; disruption from the announcement, pendency and/or completion of the
Transaction, including potential adverse reactions or changes to business
relationships with customers, employees, suppliers or regulators, making it more
difficult to maintain business and operational relationships; and the risk that,
following the Transaction, the combined company may not be able to effectively
manage its expanded operations; the extent and duration of the disruption to
business activities caused by the global health crisis associated with the novel
coronavirus pandemic ("COVID-19") outbreak, including the effects on vehicle
miles driven, on the financial health of the Company's business partners, on
supply chains, and on financial and capital markets; declining cigarette sales
volumes; the Company's dependence on the convenience retail industry for
revenues; the Company's dependence on qualified labor, senior management and
other key personnel; competition in the Company's distribution markets,
including product, service and pricing pressures related to COVID-19; risks and
costs associated with efforts to grow the Company's business through
acquisitions; the dependence of some of the Company's distribution centers on a
few relatively large customers; manufacturers or retail customers adopting
direct distribution channels; fuel and other transportation costs; failure,
disruptions or security breaches of the Company's information technology
systems; the low-margin nature of cigarette and consumable goods distribution;
the Company's reliance on manufacturer discount and incentive programs and
cigarette excise stamping allowances; the Company's dependence on relatively few
suppliers and the Company's ability to maintain favorable supplier arrangements;
disruptions in suppliers' operations, including the impact of COVID-19 on the
Company's suppliers as well as supply chain, including potential problems with
inventory availability and the potential result of higher cost of product and
freight due to high demand of products and low supply for an unpredictable
period of time; product liability and counterfeit product claims and
manufacturer recalls of products, including ongoing litigation related to Juul
products; the Company's ability to achieve the expected benefits of
implementation of marketing initiatives; failing to maintain the Company's brand
and reputation; unexpected outcomes in legal proceedings; attempts by unions to
organize employees; increasing expenses related to employee health benefits;
changes to minimum wage laws; failure to comply with governmental regulations or
substantial changes to governmental regulations, including increased regulation
of electronic cigarette and other alternative nicotine products; risks related
to changes to the Company's workforce, including reductions to hours, headcount
and benefits as a result of COVID-19; earthquake and natural disaster damage;
increases in the number or severity of insurance and claims expenses;
legislation, regulations and other matters negatively affecting the cigarette,
tobacco and alternative nicotine industry; increases in excise taxes or
reduction in credit terms by taxing jurisdictions; potential liabilities
associated with sales of cigarettes and other tobacco products; changes to
federal, state or provincial income tax legislation; reduction in the payment of
dividends; currency exchange rate fluctuations; the Company's ability to borrow
additional capital; restrictive covenants in the Company's credit facility; and
changes to accounting rules or regulations.
--------------------------------------------------------------------------------
Accordingly, there are or will be important factors that could cause actual
outcomes or results to differ materially from those indicated in these
statements. These factors should not be construed as exhaustive and should be
read in conjunction with the other cautionary statements that are included in
this release and in the Company's filings with the SEC. Any forward-looking
statement, including any contained herein, speaks only as of the time of this
release or as of the date they were made and the Company does not undertake to
update or revise them as more information becomes available or to disclose any
facts, events, or circumstances after the date of this Current Report or
statement, as applicable, that may affect the accuracy of any forward-looking
statement, except as required by law.
Important Additional Information and Where to Find It
In connection with the proposed transaction, PFG intends to file with the SEC a
registration statement on Form S-4 (the "Registration Statement"), which will
include a prospectus with respect to the shares of PFG Common Stock to be issued
in the proposed transaction and a proxy statement for the Company's stockholders
(the "Proxy Statement"). The Company will send the Proxy Statement to its
stockholders, and each party may file other documents regarding the proposed
transaction with the SEC. This Current Report is not a substitute for the Form
S-4, the Proxy Statement or any other document that the Company may send to its
stockholders in connection with the proposed transaction. INVESTORS AND SECURITY
HOLDERS OF PFG AND THE COMPANY ARE URGED TO READ THE FORM S-4, THE PROXY
STATEMENT AND ANY OTHER RELEVANT DOCUMENTS (INCLUDING ANY AMENDMENTS OR
SUPPLEMENTS THERETO) THAT WILL BE FILED WITH THE SEC CAREFULLY AND IN THEIR
ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT
INFORMATION ABOUT PFG, THE COMPANY, THE PROPOSED TRANSACTION AND RELATED
MATTERS. Investors and security holders of PFG and the Company will be able to
obtain free copies of the Form S-4, the Proxy Statement and other documents
(including any amendments or supplements thereto) containing important
information about PFG and the Company once those documents are filed with the
SEC, through the website maintained by the SEC at www.sec.gov. Copies of the
documents filed with the SEC by PFG will be available free of charge on PFG's
website at www.investors.pfgc.com or by contacting PFG's Investor Relations
department at investor@pfgc.com. Copies of the documents filed with the SEC by
the Company will be available free of charge on the Company's website at
ir.core-mark.com/investors or by contacting the Company's Investor Relations
department at david.lawrence@core-mark.com.
Participants In The Solicitation
PFG, the Company and certain of their respective directors, executive officers
and employees may be deemed to be participants in the solicitation of proxies
from the stockholders of the Company in connection with the proposed
transaction.
Information about the directors and executive officers of PFG is set forth in
its (i) Form 10-K for the fiscal year ended June 27, 2020, which was filed with
the SEC on August 18, 2020 and (ii) proxy statement for its 2020 annual meeting
of stockholders, which was filed with the SEC on October 9, 2020, and on its
website at www.pfgc.com.
Information about the directors and executive officers of the Company is set
forth in its (i) Form 10-K for the fiscal year ended December 31, 2020, which
was filed with the SEC on March 1, 2021 and (ii) proxy statement for its 2021
annual meeting of stockholders, which was filed with the SEC on April 5, 2021,
and on its website at www.core-mark.com.
Investors may obtain additional information regarding the interest of such
participants by reading the Form S-4, the Proxy Statement and other materials to
be filed with the SEC in connection with proposed transaction when they become
available.
--------------------------------------------------------------------------------
No Offer or Solicitation
This Current Report is for informational purposes only and does not constitute,
or form a part of, an offer to sell or the solicitation of an offer to sell or
an offer to buy or the solicitation of an offer to buy any securities, and there
shall be no sale of securities, in any jurisdiction in which such offer,
solicitation or sale would be unlawful prior to registration or qualification
under the securities laws of any such jurisdiction. No offer of securities shall
be made except by means of a prospectus meeting the requirements of Section 10
of the Securities Act of 1933, as amended, and otherwise in accordance with
applicable law.
--------------------------------------------------------------------------------
© Edgar Online, source Glimpses
CORE-MARK HOLDING COMPANY, INC. 
